Old Boys bank on $20m guarantee

Date: December 14 2012

Josh Leeson and Robert Dillon

KNIGHTS Old Boys president John Laut holds no fears for the NRL club's future due to the $20million bank guarantee demanded by former Knights chief Steve Burraston and chairman Rob Tew as part of the club's privatisation, but feels for the predicament of the Newcastle Jets.

It was announced on Thursday that the Australian Tax Office has moved to wind up the Nathan Tinkler-owned sporting franchises due to unpaid debts of some $2.7million.

The Knights members board have the option to take control of the club and activate a $20 million guarantee if Tinkler's Hunter Sports Group cannot meet their contractual obligations for running the club, but there is no bank guarantee in place for the Jets.

"It's certainly a good fall-back position for the members committee and the football club in general, which is something I'm sure the Jets would like to have," Laut said. "I certainly hope all this can be overcome. We're dealing with people's lives, aren't we, as far as the Jets are concerned. I think the Jets are in a lot more difficult position than the Knights."

While the bank guarantee appears to safeguard the Knights, Laut said keeping the rugby league club under Tinkler's ownership was his preferred option. "I wouldn't like to see the Hunter Sports Group fall over, but we're in a much stronger position than the Jets.

"It will be very interesting to see which way the football committee goes. Whether they decide to activate the guarantee or keep going down the track."

Football Federation Australia chief executive David Gallop, who has repeatedly stated that he had "no concerns" about Tinkler's apparently precarious position, declined to comment when contacted on Thursday. But sources assured Fairfax that the Jets were an integral part of the A-League's future, primarily because of FFA's new $160 million, four-year TV deal.

The broadcasting contract states that FFA will provide five matches each week. Hence the game's governing body needs 10 teams.

Given that there is no viable alternative, FFA would rather support Newcastle, at least until alternative funding could be sourced, than set up a new franchise.

Newcastle's attendances this season also weigh heavily in their favour. The Jets have attracted an average of 14,059 fans to five games at Hunter Stadium this season. Only Melbourne Victory, Sydney and Brisbane have better home-crowd figures.

FFA has shown in the past that it is willing to support franchises that have fallen on hard times, such as Adelaide, Perth and Brisbane.

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